Decreasing Value of Charitable Deduction Would Have Negative Impact, Many Charities Say

December 8, 2009

More than half of charitable fundraisers surveyed indicated their organizations would be hurt by a White House proposal to decrease the value of the charitable deduction, according to an informal poll by the Association of Fundraising Professionals (AFP).

Fifty-seven percent of respondents said that their organizations would be hurt if the amount that donors could deduct for their charitable gifts was reduced. More than a third (35 percent) said their organization would be "hurt a lot" by the proposal and it impact.

Under the proposal that has been advanced by the White House and some members of Congress, donors earning more than $250,000 would have the value of their charitable deductions reduced from 37 percent to 33 percent.

In addition, 11 percent said their organization wouldn't be affected but though the proposal was a bad policy idea. Nineteen percent said they were undecided and needed more information, and 14 percent agreed with the idea. AFP received 802 responses to the informal poll on its website.

"While people give for many reasons, the fact is that incentives for giving-such as the charitable deduction-play an important role in how much people give, especially as the amount of the gift grows," said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. "Donors who make more than $250,000 annually typically give thousands of dollars every year-and in some cases, hundreds of thousands of dollars. Thus, the charitable deduction incentive plays an increasingly larger role in these giving decisions."

"AFP's research suggests that 2009 has been one of the most challenging years for charities and fundraising, with many organizations experiencing significantly reduced levels of giving," Maehara continued. "It simply makes no sense to enact this proposal when charities are already facing difficulties in raising the money they need to provide critically needed programs and services."

With the help of its members, AFP has urged Congress not to limit charitable deductions as proposed by the President and others. Currently, neither the House nor the Senate versions of the healthcare reforms bill contain this problematic proposal. We thank those of you who contacted your Members of Congress earlier this year in opposition to this proposal. Your voices were heard! We will continue to monitor the healthcare reform debate, as well as the proposed caps on charitable deductions, and will contact you if more grassroots action is needed on this issue.